Quotations by Jay Norris
As an end-of-day trader, your risk-to-reward ratio is much more favorable than that of a day trader. [2010] - Jay Norris
Never risk more than 5 percent of the value of your account on one transaction. [2010] - Jay Norris
We do not make an analytic, or trading, decision until the candle is closed. [2010] - Jay Norris
Volume generally trails off noticeably leading up to noon EST and stays very low until the Tokyo open. [2010] - Jay Norris
Professionals tend to use 50-day and 200-day SMAs when they are analyzing or trading securities. Moving averages and their crosses are lagging indicators, they are more suited for trading longer-term. It is at the beginning of trend changes that corrections and price swings tend to be at their biggest, making the longer-term averages and crosses more analytic tools than trading tools for more experienced traders. [2010] - Jay Norris
Currency traders often use 89-period and 144-period exponential moving averages simultaneously for their long-term charts, considering a crossover of the two averages an important signal. [2010] - Jay Norris
To have a method or a trading plan truly hardwired into your head takes many, many impressions or, ideally, many months or even years of demo or live trading. Gaining that experience takes discipline. [2010] - Jay Norris
There are three general categories of trading styles. Position, or end-of-day, trend trading tends to have the most favorable risk-reward ratio and also takes up the smallest amount of time per day. For swing trading you don't need to be sitting in front of a computer screen but you need to be able to enter orders from a portable electronic device. Day trading takes a high degree of concentration and requires the trader to be sitting in front of the computer; this type of trader has a higher winning percentage but a less favorable risk-reward ratio. [2010] - Jay Norris
One of the drawbacks of end-of-day trading is that when you get into sideways or countertrending markets, you probably are going to take losses more frequently. [2010] - Jay Norris
One of the hardest things to do in trading is to allow a profit to run, particularly after a trader has had several losers in a row. Being a position trader often means going through periods in which you have more losers than winners. When you do get a winner and learn to let the trades run, you will find that on average your winners are much larger than your losers. [2010] - Jay Norris
In a position trade--or any trade--you should be risking only a small percentage of your overall risk capital. For professionals this may be as little as 0.5 to 1 percent. For beginners, who are often undercapitalized by definition, it should never be over 5 percent and preferably should be closer to 2 percent. [2010] - Jay Norris
We recommend always starting out with just one contract per position trade and keeping your stop far enough away from price. Your stop generally should be placed just beyond the last swing high or low on the chart. [2010] - Jay Norris
Swing trading involves shorter time frames than the daily charts; this generally means trading from the 240-, 60-, and 15-minute charts. The time you could be in a swing trade can range from hours to days, and the trade can be a trend trade or a countertrend trade. Swing traders in general are less concerned with long-term trends. They also rely on trailing stops and OCO (order cancels order) orders and other automated features on current trading platforms. [2010] - Jay Norris
Short-term, or day, trading means that the trader generally does not hold positions overnight and trades a lower time frame chart such as a 15-minute or a 5-minute chart or a chart with an even lower time frame. We recommend using the 15-minute chart for timing and patterns, the 60-minute chart for direction and confirmation, and 5-minute or 3-minute charts to help time entries and exits. [2010] - Jay Norris
In day trading, you always should exit your position 5 to 10 minutes ahead of major scheduled economic releases. After an important news release we do not enter trades until the candles on the charts with the shortest time frame stop showing dojis and start showing wider candle bodies. [2010] - Jay Norris
In our trading accounts we always look to risk no more than 2 percent per trade or 6 percent per day of our risk capital. [2010] - Jay Norris
Find markets in which the short-term trends on the daily and weekly charts are pointing in the same direction. Markets you need to be cautious about are those in which the trends on the weekly and daily charts are moving in the same direction but price is at or near historical low or highs (support or resistance) and in which there is double divergence or more on the daily chart as measured by the MACD. [2010] - Jay Norris
When we view our charts, we always want the proper amount of time visible to use in making our decisions. The preferred amount of time is as follow: Monthly chart = 7 years; Weekly chart = 2.5 years; Daily chart = 8 months; 240-minute chart = 1.5 months; 60-minute chart = 10 days; 15-minute chart = 28 hours; 5-minute chart = 8 hours. [2010] - Jay Norris
Low-volume candles such as those between 17:00 and midnight Greenwich Mean Time (GMT) should be discounted. [2010] - Jay Norris
Divergence over a shorter period is more powerful than divergence over a longer period. Although most market reversals exhibit divergence before they turn, they also exhibit this behavior just before normal consolidation periods. [2010] - Jay Norris